If you were expecting those new summer outfits from Shein this weekend, you might have to wait a bit longer.
The laws have not changed to make duty-free de minimis shipping any more difficult, despite two new bills from the House Ways & Means Committee Republicans this spring, but U.S. Customs and Border Protection (CBP) is starting to get proactive. They’re starting with e-commerce shipments arriving via air cargo and entering the U.S. via Los Angeles International Airport (LAX).
According to The Loadstar, an air freight news and information publisher, merchandise on cargo flights coming into LAX from mainland China, many of which are Shein and Temu, are being diverted to Customs warehouses this week for further review. The article said CBP so far has found narcotics and false declarations of package contents in order to meet the price threshold of $800 for duty-free de minimis entry.
Over the last year, evidence has been piling up that there is no way to effectively police millions of small package imports arriving daily.
Private air cargo logistics companies have been surging their use of de minimis, particularly as CBP’s “Type 86” program promises expedited clearance for de minimis packages. Think of Type 86 as ‘TSA Pre’, except for overseas vendors beyond our jurisdiction.
Freight forwarders told them that they were expecting five-times-a-week deliveries from LAX to Chicago and JFK International, but that is now on hold. One large forwarder confirmed to Loadstar that CBP was checking documentation and cargo descriptions “very closely”, adding that “It’s a sign that CBP is trying to make it more difficult.”
See CPA’s position on the de minimis provision here.
It seems that only flights from mainland China airports are being held up. Flights from Hong Kong are not being checked, suggesting any astute China shipper will eventually catch on to that and ship from there or from partners in Singapore.
When it comes to e-commerce logistics, the 11-year-old Alibaba-funded logistics giant Cainiao is No. 1. It is unclear if any Cainiao flights were stopped at LAX.
Cainiao covers cross-border express delivery for online orders and has overseas local services operators to deliver directly from China in anywhere from five to 10 days. They also have operations in Southeast Asia.
Allegedly, one Chinese mainland carrier is thought to have halted shipments temporarily, to ensure that all shipments were fully checked in China before going to the US. According to Loadstar, global French carrier CMA CGM Air Cargo, which was planning to begin flights from China to the U.S. this year, may postpone the launch of their de minimis bandwagon service originally slated for this month.
A charter broker also told Loadstar that the express shippers market was “really nervous” about the CBP’s sudden crackdown. Rumor has it that Chinese companies like Shein and Temu were worried. They should be. As it is, their entire business model for the U.S. market is based on de minimis.
Is The Government Finally Getting Tough on De Minimis Shipments from China? (No.)
If you were expecting those new summer outfits from Shein this weekend, you might have to wait a bit longer.
The laws have not changed to make duty-free de minimis shipping any more difficult, despite two new bills from the House Ways & Means Committee Republicans this spring, but U.S. Customs and Border Protection (CBP) is starting to get proactive. They’re starting with e-commerce shipments arriving via air cargo and entering the U.S. via Los Angeles International Airport (LAX).
According to The Loadstar, an air freight news and information publisher, merchandise on cargo flights coming into LAX from mainland China, many of which are Shein and Temu, are being diverted to Customs warehouses this week for further review. The article said CBP so far has found narcotics and false declarations of package contents in order to meet the price threshold of $800 for duty-free de minimis entry.
Over the last year, evidence has been piling up that there is no way to effectively police millions of small package imports arriving daily.
Private air cargo logistics companies have been surging their use of de minimis, particularly as CBP’s “Type 86” program promises expedited clearance for de minimis packages. Think of Type 86 as ‘TSA Pre’, except for overseas vendors beyond our jurisdiction.
Freight forwarders told them that they were expecting five-times-a-week deliveries from LAX to Chicago and JFK International, but that is now on hold. One large forwarder confirmed to Loadstar that CBP was checking documentation and cargo descriptions “very closely”, adding that “It’s a sign that CBP is trying to make it more difficult.”
See CPA’s position on the de minimis provision here.
It seems that only flights from mainland China airports are being held up. Flights from Hong Kong are not being checked, suggesting any astute China shipper will eventually catch on to that and ship from there or from partners in Singapore.
When it comes to e-commerce logistics, the 11-year-old Alibaba-funded logistics giant Cainiao is No. 1. It is unclear if any Cainiao flights were stopped at LAX.
Cainiao covers cross-border express delivery for online orders and has overseas local services operators to deliver directly from China in anywhere from five to 10 days. They also have operations in Southeast Asia.
Allegedly, one Chinese mainland carrier is thought to have halted shipments temporarily, to ensure that all shipments were fully checked in China before going to the US. According to Loadstar, global French carrier CMA CGM Air Cargo, which was planning to begin flights from China to the U.S. this year, may postpone the launch of their de minimis bandwagon service originally slated for this month.
A charter broker also told Loadstar that the express shippers market was “really nervous” about the CBP’s sudden crackdown. Rumor has it that Chinese companies like Shein and Temu were worried. They should be. As it is, their entire business model for the U.S. market is based on de minimis.
Why the sudden change of heart at Customs?
Both houses of Congress have made the de minimis provision an issue over the last two years. Several bipartisan bills have been written, and China is the target of them all. China accounts for roughly 60% of de minimis packages, according to CBP estimates.
Still, these voices on Capitol Hill are in the minority. The majority, including inside CBP, are more interested in the free flow of goods, the lower the tariff, the lower the cost, the happier they are.
For those who operate in this market – the express shippers who handle the manufactured goods from China and collect their freight fees to get them from a foreign airport to a domestic one, are now watching their market share erode to companies like Cainiao, and smaller express shippers from Asia.
Express shippers like UPS – which have their own dedicated ports of entry called an Express Consignment Carrier Facility – are starting to lose business to these new e-commerce logistics companies.
CBP’s Type 86 de minimis pilot program, deployed in 2019, enabled these newcomers to submit documentation about their cargo online and get rapid clearance from CBP, not all that different from how the legacy express shippers work. This new competition likely turned FedEx and others in favor of cracking down on the China express shippers who are the perfect match for China de minimis businesses like Shein and Temu.
For CBP meanwhile, the recent hold-ups and inspections at LAX are part of their new push to better police the flood of small packages coming in via the de minimis provision; something CBP officials have been promising Congress in hearings for the past year. The big question is whether this is performative, designed to persuade Congress away from passing any meaningful de minimis reforms.
The U.S. e-commerce logistics market size is estimated to reach $129.54 billion in 2024 and is expected to reach $198.39 billion by 2029, according to some estimates.
E-commerce sales in the U.S. surpassed the $1 trillion mark for the first time in 2022. Political challenges associated with China, and regulatory compliance on laws like the Uyghur Forced Labor Prevention Act, remain a risk to de minimis in its current form.
CPA estimated that de minimis shipments from China in 2022 added another $188 billion to our roughly $382 billion deficit. Adding those numbers together and you get a record-breaking trade deficit with China despite tariffs.
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